Bill Miller and Value Trust Essay

1. How well has observe Trust performed in recent years? In making that assessment, what benchmark(s) ar you using? How do you measure investment proceeding? What does good performance mean to you?Value believe had outperformed its benchmark index, the Standard & poor 500 Index for 14 years in a course am average annual total return of 14.6 percent, which surpassed the S&P 500 by 3.67% per year. Value trust had earned a cumulative return of to a greater extent than 830% over the previous 14 years, more than double that its average peer and the index.There are two ways to mearsure investment performance the plowshare of annual growth rate of NAV assuming reinvestment (the total return on invenst) and the absoulute dollar value straightaway of an investment made at some time in the past. These measure then compared with the performance of a benchmark portfolio such as the Russel 2000 Index or the S&P 500 Composite Index.2. What great power explain the funds performance? To what extent do you believe an investment schema, such as Mills explains performance?Some observers attributed this success to the fund managers conscious strategy of staying fully invested at all times rather than attempting to time the extent of commercialize investments. Another best-selling(predicate) explanation for the funds performance was the unusual skill of Bill Miller, the funds portfolio manager. His get on was research-intensive and highly concentrated when 50% of its assets were invested in just 10 large-capitalization companies and he was not opposed to take large positions in the stocks of growth companies.3. How easy will it be to sustain Millers historical performance record into the future? What factors support your conclusion?NOT EASYEMHLUCKY example4. Consider the mutual fund industry. What roles do portfolio managers play? What are the differences between fundamental and technical securities abridgment? How well do mutual funds generally perform relative to t he overall grocery store? adept analysis This involved the identification of profitable investment opportunities based on trends in stock prices, volume, market setiment, Fibonacci numbers,etc.Fundamental analysis This approach relied on insights afforded by an analysis of the economic fundamentals of a companion and its industry supply and demand costs, growth prospects, etc.Mutual funds were able to perform up to the market on a gross-returns basis however, when expenses were factored in, they underperformed the market.5. What is capital market efficiency? What are its implications for investment performance in general? What are the implications for fund managers, if the market exhibits characteristics of strong, semi-strong, or weak efficiency?Three levels of market efficiency.6. Suppose that you are an advisor to wealthy individuals in the area of equity investments. In 2005, would you recommend investment in Millers Value Trust? What beliefs about the equity markets does you r answer reflect?